11th Sep 2015 07:34
LONDON (Alliance News) - London stock indices opened narrowly mixed Friday, with equities mostly driven by broker rating changes, as UK investors focus on the consumer inflation expectations data expected at 0930 BST.
The FTSE 100 index was down 0.3% at 6,140.36, the FTSE 250 was flat at 17,020.99, and the AIM All-Share up 0.1% at 734.71. In Europe, the CAC 40 index in Paris was flat and the DAX 30 in Frankfurt was down 0.2%.
DIY retailer Kingfisher was up 2.2% after being upgraded to Buy from Neutral by UBS, while drinks company Diageo was up 0.7% after being upgraded to Outperform from Neutral by Exane BNP Paribas.
Shares in Rio Tinto, up 1.3%, also were benefiting from an upgrade to Buy from Neutral by UBS. Meanwhile, fellow miners Glencore, up 3.2%, Anglo American, up 2.2%, and BHP Billiton, up 1.0%, were recovering from losses seen Thursday.
In the FTSE 250, Drax Group was down 3.3%. Goldman Sachs has cut the electricity generator to Sell from Neutral.
Pub operator JD Wetherspoon shares were up 0.8% even though it reported a drop in pretax profit in its recently-ended financial year. Despite growth in revenue, Wetherspoon took a hit to its profit margin from higher staff and utilities costs.
The pub company reported a 2% fall in pretax profit in the year ended July 26 to GBP77.8 million from GBP79.4 million the year before, although revenue rose 7.4% to GBP1.51 billion from GBP1.41 billion.
Operating margin before exceptional items decreased to 7.4% from 8.3% which Wetherspoons said was due to lower gross margin and increases in staff costs, utilities and depreciation, which put pressure on profit. The group will pay a total dividend of 12.0 pence, which is flat year-on-year.
German consumer price inflation remained stable as initially estimated in August, final data from Destatis showed Friday. The consumer price index rose 0.2% year-on-year, the same as in July. The rate matched the preliminary estimate published on August 28. The measure climbed for a seventh month running. On a monthly basis, consumer prices remained flat in August after rising 0.2% in July.
The only significant economic data release expected Friday in the UK is consumer inflation expectations, due at 0930 BST.
Oanda analyst Craig Erlam explains that, in a period of low inflation, it is important for inflation expectations to remain high or the consumer may start putting off large purchases and wait for cheaper prices, or just not be worried about them rising much.
"In a country like the UK, that could lead to some serious problems and consumer spending is so important to the economy," Erlam says.
In Asia on Friday, the Japanese Nikkei 225 index closed down 0.2%. In China, Hong Kong's Hang Seng index trades up 0.1% and the Shanghai Composite ended up 0.1%
Wall Street ended higher Thursday, with shares in tech-giant Apple regaining the losses seen after the launch of new versions of its key products on Wednesday. The DJIA and the S&P 500 closed up 0.5%, while the Nasdaq Composite finished up 0.8%.
US investors focused again Thursday on employment data coming from the US as they looked for clues as to whether the Fed will raise rates at next week's Federal Open Market Committee meeting.
The US Labor Department released a report showing that jobless claims fell slightly, in line with estimates in the week ended September 4. The report said initial jobless claims fell to 275,000, a decrease of 6,000 from the previous week's revised level of 281,000.
The report showed a slight increase in continuing jobless claims, a reading on the number of people receiving ongoing unemployment assistance. Continuing claims increased by 10,000 in the week ended August 28.
In the rest of the economic calendar, in the US, the producer price index is due at 1330 BST, before the Reuters/Michigan consumer sentiment index, due at 1500 BST.
By Daniel Ruiz; [email protected]
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